There are Many Entrepreneurs but Few Opportunities in the Internet Business

The Turkish portal Mynet has 2,5 million registered e-mail users. Emre Kurttepeli who is the owner of Mynet and the Chairman of Turkish Internet Foundation says, “Many web sites selected advertisements as the unique revenue item. Everybody wanted to be the everything of everybody and the market got tightened. Consolidation was inevitable. There are so many entrepreneurs but very few opportunities.” Emre Kurttepeli whose name took its place in the information sector by selling the infrastructure installation company Fornet to Koç.net for 7.1 million dollars in 1999, is now breaking new records with the numbers he has reached on the internet sector. Mynet which has 2,5 million registered e-mail users today is the first Turkish portal of Turkey. Emre Kurttepeli, the Chairman of the Board of Mynet which survived in the period when many internet companies were shut down or down-sized, is the Chairman of the Turkish Internet Foundation as well. We talked to Kurttepeli about the success of Mynet, the internet sector and glanced over the telecommunication market that will be created after the de-monopolization of Telekom in 01 January 2004.

Kurttepeli believes that the fact that the content on the internet, especially the e-mail service, is free of charge since the beginning of the demolition of the new economy. Kurttepeli, who says that it is compulsory to correctly determine the revenue items on the internet and which services to be free, states; “Many services on the internet are free of charge, we did not receive any fee so far. It is hard to persuade people to pay for these services. This situation prevents us to receive fees for the services that we provide. Compare the e-mail with SMS, a word of SMS is 0,5 piaster, while the e-mail is limited and free of charge. This is unbelievable. Because of this habit, there will always be free services. But, for certain services, people will pay and receive them. This is the point of view of Mynet about the new economy.”

‘It is wrong to compare Turkey and USA’

Furthermore, Kurttepeli believes that it is not right for many sites that are opened on the internet to select the advertisement as the only revenue item. Kurttepeli who says, “It is certain that the advertisement does not cover this work on his own” and goes on like this: “In Turkey, we have to get rid of the portal structure first of all. Middle and small sized players cannot survive when they cannot receive advertisements. But when the content production starts, miscellaneous revenue resources are revealed, too.”

Kurttepeli states that the biggest mistake that the Turkish companies which invests on the internet on Turkey make is “to compare their works and the market with those of USA.” Kurttepeli remarks that the advertisement market is USA is much larger than that in Turkey and it is very wrong to compare Turkey and USA.

‘The advertisement revenues are very low’

According to the predictions, the advertisement market on the internet in Turkey reached at 5 million dollars of endorsement last year. This year the prediction is that it will reach at 7-8 million dollars. Kurttepeli remarks that the advertisement market is not expanding rapidly. Kurttepeli states, “There is a transformation in Turkey from now on. 10-15 companies from telecommunication, banking, and finance sectors have advertisement budgets. These three sectors include the companies which make the most use of computer technologies and internet. It is a very appropriate media for the prestige of those companies.”

Kurttepeli explains the reasons of survival of Mynet since its foundation as “There is such an environment on the internet that, as if everything will be carried here and the will be no shops left in the world. But in a short time, we altogether saw that it was not so. The biggest true movement of Mynet was to foresee that the internet is not the only channel. In Turkey, everybody wants to be “the everything of everybody. For this reason, the market got tightened. There were 30 players in the market before, but today there only 3-5 players left. But in the past I said these, too. Consolidation was inevitable and this happened. We can understand that there are not enough opportunities for so many players.”

There are 2.5 million e – mail users

As Kurttepeli stated, there are 2.5 million active e-mail users of Mynet. This figure demonstrates 50% of the market, when we think that there are 5 million internet users in Turkey. Out of the whole subscribers on Mynet, 5% of them use the chargeable services. The users who set up the upper version of Mynet e-mail, e.g. high capacity and virus-controlled system, can make revenues through corporate services with information and meeting services. 80% of the revenues of the company are from advertisements and 20% is from the chargeable services. As we did not make revenues from these chargeable services last year, the whole of the revenues was from advertisements.

‘What do you give along with the package?”

Kurttepeli says that when we look at the internet accession packages that are sold in Turkey, 60% of them is realized on the one-month packages. Kurttepeli who states that the internet users obtained incorrect habits as a result of the wrong inducement says, “The service providers transformed this work into a promotion means. Imagine, the users telephone our call center and ask, “What do you give this month?”

‘The same mistake should not be made with Telekom’

On 1 January 2004, after the unmonopolization in the telecommunication sector, many internet companies are preparing to take place in this sector. The most attractive field is VoIP. That is to say, making telephone calls on the internet. Kurttepeli who states that international calls will be 10 times cheaper has such expectations about the market: First of all, Telekom will reduce the prices and prevent the new ventures in the market. As it does not have the marketing power, it will choose to compete through prices. About 200 companies are seeking to enter the VoIP sector. Imagine, the international calls will be 10 times cheaper. But, if the competition reduces the figure under 1, the market of 200 players will turn into a market of 3-5 players as in the sector of service providers. We will work with the companies who provide this service by choosing the method of marketing instead of infrastructure. That is to say, we will deal with marketing without entering the infrastructure field.